Dealership Markups Are Finally Disappearing

If you tried to buy a new car over the past few years, you likely experienced the shock of looking at a window sticker and seeing a massive “Market Adjustment.” These dealership markups added thousands of dollars to the price of a vehicle, turning an exciting purchase into a frustrating ordeal. The good news is that this trend is finally coming to an end.

Automakers are stepping in to protect their brand reputations, and returning inventory levels are doing the rest of the work. Here is a detailed look at which car brands are forcing dealers to drop their markups and how the market is finally returning to normal.

The End of the "Market Adjustment" Era

Between 2021 and 2023, a massive shortage of semiconductor chips completely halted the global automotive supply chain. Dealership lots were empty. Because supply was incredibly low and buyer demand was high, independent franchise dealers began adding Additional Dealer Markups (ADMs) to the Manufacturer Suggested Retail Price (MSRP).

Buyers were seeing $5,000 markups on basic commuter cars like the Honda Civic and staggering $30,000 markups on highly desired vehicles like the Ford Bronco. However, the market has shifted dramatically. According to recent data from Kelley Blue Book, the average transaction price for a new vehicle has officially fallen below MSRP. Dealership lots are filling up again, and high interest rates have cooled buyer demand.

More importantly, corporate automakers have drawn a line in the sand. Manufacturers realized that greedy dealerships were ruining brand loyalty. If a customer feels cheated at a Ford dealership, they are likely to blame Ford, not just the local franchise owner.

Car Brands Leading the Charge Against Markups

Several major automakers have taken aggressive steps to punish dealerships that overcharge customers. Because franchise laws protect independent dealers, corporate automakers cannot legally dictate the final sale price of a car. They can, however, control inventory.

Here are the brands that used inventory threats to crush dealership markups.

Ford Takes a Hard Line

Ford Motor Company was one of the first brands to publicly condemn dealership markups. CEO Jim Farley made headlines when he announced that the company was actively monitoring dealerships that added massive fees to high-demand vehicles like the Ford F-150 Lightning, the Ford Bronco, and the Maverick.

Farley issued a strict warning: dealerships that continued to charge extreme markups would lose their future vehicle allocations. This means if a dealer kept overcharging for the F-150 Lightning, Ford corporate would stop sending them F-150 Lightnings altogether. This threat proved highly effective, and today, you can routinely find F-150s and Broncos selling at or slightly below MSRP.

General Motors Protects Its Flagships

General Motors (GM) took a similar approach to protect its most anticipated releases, specifically the Chevrolet Corvette Z06, the GMC Hummer EV, and the Cadillac Escalade V.

GM executives sent letters to their dealer network warning them that extreme markups would result in reduced allocations for high-performance vehicles. GM also took an extra step to stop “flippers.” The company announced that if a customer bought a high-demand vehicle and resold it within six months, GM would block certain warranties from transferring to the second owner. This double-sided approach forced dealers to play fair and kept speculators out of the market.

Hyundai and Kia Protect Their Image

During the peak of the shortage, Hyundai and Kia dealerships were notorious for marking up the Kia Telluride SUV and the Hyundai Ioniq 5 electric vehicle. Markups of $10,000 were incredibly common.

Hyundai and Kia corporate offices sent official letters to their respective dealer networks warning that these practices were damaging the long-term health of the brands. Like Ford and GM, they threatened to withhold inventory from the worst offenders. Today, as Kia and Hyundai inventory levels have stabilized, those massive markups on the Telluride and Ioniq 5 have largely vanished.

Subaru Stays True to Its Roots

Subaru deserves special mention because the brand actively fought against markups from the very beginning of the supply chain crisis. The company operates on a corporate philosophy called the “Subaru Love Promise.”

Subaru of America executives sent memos to retailers urging them to honor MSRP. They reminded dealers that charging over MSRP would break the trust of their highly loyal customer base. While a few rogue dealers still added small markups, the vast majority of Subaru dealerships strictly adhered to MSRP pricing throughout the entire vehicle shortage.

How to Ensure You Pay MSRP or Less Today

Even though the worst of the markup era is over, some dealerships might still try to sneak in extra profit through mandatory add-ons like nitrogen-filled tires or expensive paint protection packages. Here is how you can protect yourself.

• Look for high-inventory brands: Brands like Jeep, Dodge, and Chrysler currently have some of the highest days of supply in the industry. You should expect massive discounts (often 10% or more below MSRP) on these vehicles.
• Expand your search radius: If your local dealership refuses to drop a markup, look at dealerships 50 or 100 miles away. A two-hour drive could save you thousands of dollars.
• Ask for the Out-The-Door (OTD) price: Never negotiate based on the monthly payment. Always ask the dealer to email you the complete OTD price, which includes the price of the car, taxes, and registration. This will instantly reveal any hidden markups or forced accessories.
• Be willing to walk away: The power is finally back in the hands of the buyer. If a dealer tries to charge over MSRP for a standard vehicle, simply stand up and leave.

Frequently Asked Questions

Is it illegal for a dealership to charge over MSRP? No. MSRP stands for Manufacturer Suggested Retail Price. Because dealerships are independent franchises, they are legally allowed to sell the vehicle for whatever the market will bear.

Are any cars still being marked up right now? Yes, but they are incredibly rare. You might still see small markups on highly exclusive, limited-production vehicles like the Porsche 911 GT3, the Honda Civic Type R, or the Toyota GR Corolla. For 99% of daily commuter cars and family SUVs, markups are gone.

Can I negotiate below MSRP today? Absolutely. For many brands, you can and should negotiate below the sticker price. Vehicles like the Ram 1500, Ford Mustang Mach-E, and Nissan Rogue are routinely selling for hundreds or thousands of dollars below MSRP due to rising inventory levels and factory incentives.